There’s always something new and exciting happening in the world of debt recovery. Below, we have taken a look at five of the current trends shaping the industry in a big way.
5 Debt Recovery Trends You Need to Know
- Self Service Debt Recovery Processes
A lot of debt recovery agencies are embracing self service tools, enabling debtors to control their own repayments. This reflects a lean towards a more customer-centric approach to collecting debt, and relies on customer self service platforms to handle a lot of the administrative side of things. With a self service debt recovery process, it’s a lot easier to provide a personalised customer experience, whilst also ensuring that debts can be recovered at any time. Instead of being limited to standard working hours, a self service platform can process payments instantly, leading to better debt recovery results.
- Omnichannel Debt Collection
Thanks to advancements in technology, debtors are experiencing an omnichannel approach to debt collection. This is all about ensuring that debtors experience the same correspondence, regardless of how they are contacted. Creditors are becoming increasingly aware of debtors’ various contact preferences, and an omnichannel debt collection process ensures the most effective method is used. This could mean contacting a debtor via text message, telephone call, WhatsApp, email or any other form of messaging. Using technology, an omnichannel debt collection approach can determine how best to reach an individual, including when they are most likely to respond and pay.
- 360 Degree View of a Debtor
There has been a move towards having a ‘single view of debt’ and creditors are encouraged to consider a 360 degree view of a debtor when chasing payments. This is a big change from before, when a lot of credits simply looked at the money owed. With this approach, data about how much a person owes is analysed, helping collections teams to make more accurate decisions and work more efficiently. It’s also a way to simplify payment plans, making it easier to repay an outstanding debt.
- New Legislation
Back in 2021, the Government introduced a new scheme focusing on the impact of debt recovery. The aim of the legislation is to offer a lot more protection to debtors, by qualifying what a ‘problem’ debt is and preventing creditors from taking any action on these debts during a “breathing space”. This is time given to a debtor during which they are protected from legal proceedings and creditor action for up to 60 days. During this time, and under the new legislation, creditors have strict rules to abide by, such as pausing enforcement action and freezing interest on the debt.
- Chatbots and Personalised Debtor Experiences
There has been an increase in the use of chatbots in the majority of industries, including debt recovery. Using chatbots, debt recovery agencies can provide debtors with a personalised and humanised experience, without having to navigate the complexities of manpower. This gives creditors the chance to optimise their debt recovery process, work around the clock, and process a large amount of enquiries at once. Debtors can immediately talk to someone and make a payment, without having to wait for a customer service representative to be free.
At Cobra Financial, we stay up to date with the latest trends in debt recovery, ensuring that we are always able to provide you with a flawless debt collection service. Contact us to find out more.
